India Q3 Growth Remained Tepid, Exports Was The Bright Spot

By Shuli Ren

For the third quarter, India grew 4.8% year-on-year, faster than the consensus 4.6% or the second quarter’s 4.4%.

But the growth remained tepid. The faster pace was in part due to better weather. Here are Barclays analysts Siddhartha Sanyal and Rahul Bajoria:

Growth in the agriculture sector recovered to 4.6% y/y, on the back of good monsoons and better sowing. Manufacturing remaines weak, rising only 1.0% y/y. Services demand continues to be feeble, showing around 6.0% growth, significantly lower than its five-year average growth of 8.6%. On the expenditure side, private consumption, typically the most resilient segment of growth, remains very weak, rising only 2.2% y/y.

But exports were the bright spot, ” rising 2.6% y/y.”

An economic recovery, if any, is likely to be slow, because the Reserve Bank Of India is likely to keep a tight lid on liquidity and floor on benchmark rates to fight inflation and stabilize rupee:

Even as growth remains weak, near-term RBI policy actions will likely be dictated predominantly by inflation and the rupee.

But the prospect of a more stable rupee and an economy that has already bottomed out has brought foreign institutional investors back. The Wisdomtree Trust India Earnings Fund (EPI) gained 8.5% this quarter. The Powershares India Portfolio (PIN) gained 5.2%. The iShares MSCI India ETF (INDA) gained 7.3%.

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NOVEMBER 30, 2013 4:49 P.M.

White Knight 196 wrote:

What a lie. The growth is huge in India. They have over 1.2 billion people and are growing rapidly. In the next 5 to 10 years their population will surpass China's. In India many people tend to have large families and the prostitutes have large families too over China having small families. The growth is huge there. The media don't want you to know the real numbers because company heads steal in third world countries from the companies for their own personal wealth. So keep on publishing the lies.

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Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools. She studies multiple languages and photography.